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Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood that anyone will get this flu decreases as more people receive the vaccine. Price MC 110 100 90

Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood that anyone will get this flu decreases as more people receive the vaccine. Price MC 110 100 90

Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
7th Edition
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter7: Consumers, Producers, And The Efficiency Of Markets
Section: Chapter Questions
Problem 7PA
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Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood that anyone will get this flu decreases as more people receive the vaccine. Price MC 110 100 90 80 60 50 40 20 D-1 D-2 50 75 125 150 200 275 Flu Vaccines What is Consumer Surplus when P = 8O? What is Producer Surplus when P = 80? Policymakers should impose a vaccines. Select one: of on a. tax; 25 b. subsidy; 25 c. tax; 30 d. subsidy; 30
Transcribed Image Text:Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood that anyone will get this flu decreases as more people receive the vaccine. Price MC 110 100 90 80 60 50 40 20 D-1 D-2 50 75 125 150 200 275 Flu Vaccines What is Consumer Surplus when P = 8O? What is Producer Surplus when P = 80? Policymakers should impose a vaccines. Select one: of on a. tax; 25 b. subsidy; 25 c. tax; 30 d. subsidy; 30
Rob owns a dog whose barking annoys Rob's neighbor Jane. Suppose that the benefit of owning the dog is worth $700 to Rob and that Jane bears a cost of $500 from the barking. Assuming Rob has the legal right to keep the dog, a possible private solution to this problem is that Select one: a. Rob pays Jane $600 for her inconvenience. b. Jane pays Rob $650 to give the dog to his parents who live on an isolated farm. c. Jane pays Rob $800 to give the dog to his parents who live on an isolated farm. d. There is no private transaction that would improve this situation. East Lansonia is a town of ten people. There are two occupations: basket weaving and fishing. Basket weavers make $5 per day. The income, I, from fishing is a function of the number of people fishing on a given day. This is because the more fishing boats out on the lake, the less fish each boat will catch. Specifically, I = 16 – 2*n , where n is the number of fishers. The lake is open-access, or publicly owned, so that any of the ten villagers is free to fish on the lake. How many people will fish in the private market outcome? What is total village income in the private market outcome?
Transcribed Image Text:Rob owns a dog whose barking annoys Rob's neighbor Jane. Suppose that the benefit of owning the dog is worth $700 to Rob and that Jane bears a cost of $500 from the barking. Assuming Rob has the legal right to keep the dog, a possible private solution to this problem is that Select one: a. Rob pays Jane $600 for her inconvenience. b. Jane pays Rob $650 to give the dog to his parents who live on an isolated farm. c. Jane pays Rob $800 to give the dog to his parents who live on an isolated farm. d. There is no private transaction that would improve this situation. East Lansonia is a town of ten people. There are two occupations: basket weaving and fishing. Basket weavers make $5 per day. The income, I, from fishing is a function of the number of people fishing on a given day. This is because the more fishing boats out on the lake, the less fish each boat will catch. Specifically, I = 16 – 2*n , where n is the number of fishers. The lake is open-access, or publicly owned, so that any of the ten villagers is free to fish on the lake. How many people will fish in the private market outcome? What is total village income in the private market outcome?
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